Gold as Equity Diversifier in Recessions
In uncertain times like these, when the news only brings Corona panic and the economic crisis, we have set ourselves the goal of bringing some clarity to the current situation with our report “Portfolio Characteristics: Gold as Equity Diversifier in Recessions”. The report shows why gold continues to be a good stock diversifier in recessions and gives an outlook on what the future might bring.
Key Takeaways
• Our historical analysis shows that both gold and US Treasury bonds have been able to absorb a significant share of stock drawdowns in a portfolio context. Retrospectively, both asset classes are suitable as effective stock diversifiers.
• Whether (in particular, US Treasury) bonds can take on that role in the future is in question. Global debt, the zombification of the economy, and the still low yield level cast more than just a shadow of doubt on bonds in this respect. In an environment of this sort, gold presents significantly better future opportunities than bonds.
• A detailed analysis of gold in recessions shows that the precious metal has achieved a clearly positive average performance across all recession phases scrutinized, thus effectively offsetting stock price losses.
Portfolio Characteristics: Gold as Equity Diversifier in Recessions
Let's meet!
Do you have questions about our product or do you want to arrange a personal meeting?
